Monday, April 28, 2025 Morning Market Briefing: A Quiet Open Ahead for Canadian Markets
After one of the more turbulent weeks in recent memory — tariff headlines whipsawing North American equities, the loonie caught in the crossfire, and TSX energy names selling off hard — Monday morning is shaping up to be a measured pause rather than another sprint. U.S. futures are sitting near flat. TSX futures are pointing to a modest positive open. If last week was noise, this week might be the market catching its breath before the next round of data hits.
What Happened Overnight and Into Pre-Market
Asian markets closed mixed overnight. Japan’s Nikkei 225 edged slightly lower as the yen continued to show strength against the U.S. dollar, pressuring exporters. Hong Kong’s Hang Seng posted modest gains, partly driven by continued optimism around selective Chinese stimulus measures, though nothing has been formally confirmed. European markets opened quietly, with the FTSE 100 and DAX both trading within tight ranges.
On the currency side, the Canadian dollar is hovering near the 72-cent U.S. range this morning. That’s not a dramatic move, but it matters. A softer loonie means imported goods cost more — think groceries, electronics, anything priced in USD at the source — and it also affects how Canadian investors holding U.S.-denominated assets see their returns when converted back to CAD. A weaker loonie inflates those foreign returns on paper, but it’s a double-edged situation if you’re spending in Canada.
Crude oil, which is always central to any TSX morning briefing, is trading around the low-to-mid $60s USD per barrel for WTI. That’s a range that keeps Canadian energy producers operating, but it’s not the $80-plus environment where margins get comfortable. Natural gas prices remain subdued. Gold continues to hold near historically elevated levels — a sign that uncertainty hasn’t fully left the room regardless of how calm futures look this morning.
What This Means for Canadian Retail Investors
For most Canadians with a balanced TFSA or RRSP portfolio, a quiet Monday open is genuinely fine news. It means you’re not waking up to emergency decisions. But quiet doesn’t mean nothing is happening beneath the surface, and this week has a few things worth keeping your eye on.
The Bank of Canada’s next rate decision is approaching, and markets are watching every data point through that lens. Inflation numbers, employment data, and even the tone of U.S. Federal Reserve commentary this week will all factor into how Canadian bond yields behave. Bond yields matter even if you don’t own bonds directly — they influence mortgage rates, GIC rates, and the relative attractiveness of dividend stocks versus fixed income.
If you’re holding a significant cash position in your TFSA or FHSA waiting for a better entry point, mornings like this are worth using for portfolio review rather than action. Check your asset allocation. Make sure your TFSA contribution room is accurate for 2025 (the annual limit is $7,000 again this year). If you opened an FHSA and haven’t maximized it yet, that’s $8,000 per year in deductible, tax-sheltered room that doesn’t roll over indefinitely.
Sector Breakdown: Where the TSX Stands This Morning
The TSX Composite is broad, but a few sectors tend to drive the index’s direction on any given day.
- Energy: With WTI in the low $60s, Canadian producers like those in the oil sands are watching margins closely. Pipeline names may offer more stability given their fee-based revenue models, but they’re not immune to sentiment shifts around energy demand. Watch for any fresh commentary from major producers this week — earnings season is in full swing.
- Financials: The Big Six banks make up a massive chunk of the TSX. With credit conditions still being assessed in a higher-rate environment and mortgage renewal pressures mounting for many Canadian households, bank earnings releases this week (where applicable) will be closely read. Provisions for credit losses are the number analysts are focused on.
- Materials: Gold miners are worth watching given elevated spot prices. Companies with Canadian operations and USD-denominated gold revenues are in an interesting position with the current loonie level. Higher USD gold prices translate well when your costs are in CAD.
- Utilities and REITs: These rate-sensitive sectors have been choppy. If bond yields ease this week on softer economic data, you may see some rotation back into yield-focused names. Canadian apartment REITs are dealing with a complicated picture — higher vacancy in some urban markets starting to emerge, offset by still-elevated rents in others.
- Technology: Canadian tech is smaller than its U.S. counterpart but not irrelevant. Shopify remains a bellwether and its moves often reflect broader North American tech sentiment. Any U.S. mega-cap tech earnings this week will set the tone.
Broader Context: Tariffs, Trade, and the Canadian Situation
It’s impossible to write a Canadian market briefing right now without addressing trade tensions. The tariff situation between Canada and the United States remains unresolved in several key sectors. Softwood lumber, aluminum, steel, and agricultural products are all caught in ongoing negotiations or subject to existing measures. Canadian businesses with significant U.S. revenue exposure are managing real uncertainty around their cost structures and pricing power.
For retail investors, this isn’t necessarily a reason to make sudden portfolio moves. What it is, is a reason to understand your exposure. If a large portion of your non-registered or TFSA portfolio is concentrated in sectors directly affected by cross-border trade friction, that’s worth knowing. Diversification across geographies — including some U.S. and international exposure — has historically helped smooth out country-specific risks. That said, currency translation and foreign withholding taxes on dividends are real considerations, especially in registered accounts.
A quick note on withholding taxes: U.S. dividends received in a TFSA are subject to a 15% U.S. withholding tax that you cannot recover in Canada. The same U.S. dividends held inside an RRSP are generally exempt from that withholding tax under the Canada-U.S. tax treaty. This is one of the more practical reasons financial planners often suggest holding U.S. dividend payers in your RRSP rather than your TFSA.
A Brief Educational Note: What “Futures” Actually Tell You
You’ll see references to “futures” in nearly every morning briefing. It’s worth being clear about what they represent. Index futures — like S&P 500 futures or TSX futures — are contracts that reflect where traders expect an index to open. They trade around the clock, which is why you can get a read on market direction before North American exchanges officially open.
Futures pointing higher doesn’t guarantee a higher open, and it certainly doesn’t tell you where the market will close. Pre-market futures can shift dramatically on a single headline. They’re a useful directional signal, not a forecast. Treat them as one data point among many, not as a reason to buy or sell anything before the bell.
What to Watch This Week
- U.S. earnings from major tech and consumer companies — these will set North American sentiment mid-week
- Canadian GDP data if released — watch for revisions and how they land relative to Bank of Canada projections
- Any fresh tariff-related announcements from Ottawa or Washington
- Oil inventory data Wednesday — relevant to Canadian energy names
- The loonie’s movement relative to the USD, particularly if U.S. economic data surprises
Closing Notes
A quiet open is a reasonable time to review rather than react. Check your registered account contribution room, revisit your allocation, and make sure your portfolio reflects a plan rather than a reaction to last week’s headlines. Markets will find something to worry about — they always do.
This briefing is for informational purposes only and does not constitute financial advice. NorthMarkets is not a licensed financial advisor. Please consult a registered financial advisor or portfolio manager before making any investment decisions.